Beware! 3 Meme Stocks Waving Massive Red Flags Right Now

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In the tumultuous investment landscape, the craze over meme stocks has arguably hit a nadir, marking a critical moment to pinpoint the meme stocks to sell before the bubble bursts further. Fueled by social media speculation rather than solid financial footing, these stocks rose sharply during the pandemic, a time when stimulus checks and heightened screen time fostered impulsive investment behaviors. Yet, the warning signs are glaring: these meme stocks hold no true merit regarding operational performance, thriving merely on orchestrated online hype. It’s high time to acknowledge that the erratic performance of these meme stocks to sell more closely resembles a gambler’s folly than a savvy investment strategy.

Coinbase Global (COIN)

The Coinbase (COIN stock) logo on a smartphone screen with a BTC token. Crypto winter is setting in.

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Coinbase Global (NASDAQ:COIN) is dancing on the razor’s edge, caught in the harsh spotlight of the U.S. Securities Exchange Commission’s (SEC) scrutinizing gaze. The regulatory body has been pressuring the crypto powerhouse to trim its offerings down to Bitcoin (BTC-USD) exclusively, a move incited by the plague of scam tokens in the sector. This debacle leaves Coinbase with a tough choice to alienate a swath of crypto enthusiasts by limiting its market to BTC or wading into risky waters by flouting SEC directives, potentially harboring an environment ripe for scams.

The shifting tide, underscored by the downfall of FTX, signals troubled waters ahead for COIN as it looks to retain a clientele inclined to strike out on its own. Amidst the flux, the persistent bear hug on the crypto market exacerbates the grim scenario, pulling down trading volumes and Coinbase’s transaction sales in the second quarter of 2023. The ongoing tussle with the SEC could potentially redraw Coinbase’s operational landscape. COIN must develop a blueprint of innovation and prudent investments to weather the storm and hold its ground in a fiercely competitive arena teeming with both giants and vibrant startups.

BlackBerry (BB)

A BlackBerry (BB) sign out front of a corporate office in Silicon Valley, California.

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Once heralded by meme enthusiasts, BlackBerry (NYSE:BB) is a testament to its flash-in-the-pan online recognition. Hitting its peak popularity among the meme community in 2021, the tech stalwart’s glow has dimmed remarkably. Recent second-quarter figures cement this waning trajectory. The company is in a dicey position with revenues spiraling down to a concerning $132 million, far below the anticipated $155 million. Delayed government contracts remain a chronic thorn in its side, punctuating the declining narrative CEO John Chen has overseen for the past decade.

The deep dive in cybersecurity revenues, landing at an expected $80 million, underscores its dwindling momentum. The IoT segment, once hailed as BlackBerry’s phoenix, is now showing signs of immobility, projected to hover around a mere $49 million. Despite the occasional acquisition rumors, like recent whispers over Veritas Capital, BlackBerry’s course seems entrenched in underperformance, serving as a cautionary tale for meme-driven investors.

Nokia (NOK)

a backdrop featuring the Nokia logo with a mobile phone featuring the Nokia logo on its screen in the foreground

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Once an indomitable smartphone giant, Nokia (NYSE:NOK) has become a top-tier communications player. Though the company has done remarkably well during its transition, it has failed to impress Wall Street, having traded under the $4 for most of the past couple of years. Additionally, it has missed bottom-line estimates in the past couple of quarters, generating a negative 2.7% year-over-year growth in its most recent quarter.

Additionally, Nokia’s tepid growth, juxtaposed with the fervent progress of competitors, places it in an unfavorable position. While it may be celebrating its minor victories in the Indian market, its efforts barely scratch the surface of global demands. With its market share dwindling and an inability to counter competitors’ advantages, Nokia’s future seems precarious. Far from a promising investment, Nokia sits as a cautionary tale in the volatile world of tech stocks, making it a lackluster pick at this stage.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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